The Commodities Feed: Stronger dollar weighs on commodities
Per the full note from ING's commodities desk, a firmer dollar and higher US yields are the proximate cause of the metals complex's slide, with copper printing a near four-month low around $13,657/t and gold extending its decline into a third session. The desk's central evidence is double-barrelled: OPEC crude output rose almost 2m b/d in October to 27.16m b/d (Saudi at 9.2m b/d, Iraq near 4.5m b/d), restoring Middle East supply toward pre-war levels, while copper's pullback from September's record near $15,000/t reflects a reassessment of AI-linked demand and unresolved US tariff uncertainty. Brent hovering near $91/bbl captures the tension — supply normalisation is capping upside, but the reliance on alternative routes around the Strait of Hormuz keeps the tail-risk premium alive. With no tracked currency pair in the source and no internal consensus targets or high-impact calendar events to anchor the view, our read is that the dollar leg is the swing factor: further USD strength extends the metals drawdown, while a Hormuz disruption would invert the oil narrative entirely.
What the desk is arguing
ING's thesis is a straightforward transmission story: a firmer dollar and higher US yields are mechanically weighing on dollar-denominated commodities, and the metals complex is the clearest casualty. Per the full note , copper traded near a four-month low around $13,657/t, having pulled back from September's record near $15,000/t, while gold extended its decline into a third consecutive session. The desk explicitly flags that further dollar strength could keep copper under pressure near term — a direct, unhedged call on the USD leg.
The supporting evidence is granular. OPEC crude production rose almost 2m b/d in October to 27.16m b/d, led by Saudi Arabia (9.2m b/d, close to pre-war levels), Iraq (almost 4.5m b/d) and Kuwait, letting Brent ease to around $91/bbl as immediate availability concerns faded. On the metals side, the desk attributes copper's slide to renewed selling in technology stocks plus the firmer dollar, with investors reassessing AI-related demand expectations against unresolved US import tariff uncertainty. Aluminium's nearby LME spreads remain exceptionally tight — cash metal at a premium of more than $150/t to the three-month contract — which the desk reads as evidence of continued short-term supply constraint rather than demand collapse.
The counterfactual the desk implicitly rejects is that this is a demand-driven sell-off. If it were, LME cash spreads would be loosening, not holding a $150/t backwardation in aluminium. ING is framing this as a dollar-and-positioning story layered on top of a still-tight physical market, which is why the note stops short of calling a sustained downtrend.
How other firms see it
There is no internal per-firm coverage to group aligned or contrary houses against — the source commentary names no tracked currency pair, so we have no cross-firm spread to position ING within. The desk's dollar-strength read sits in the same channel as the broader macro consensus that a higher US 10-year yield and a firmer dollar index are the dominant cross-asset driver this quarter, but we cannot cite a specific firm target here.
What intersects the thesis is the dollar index and US 10-year yields as the transmission variables, with EUR/USD as the cleanest liquid proxy for the dollar leg and USD/JPY as the yield-sensitive read. The oil leg ties to Brent crude and the Strait of Hormuz risk premium, while copper's AI-demand narrative keeps it linked to the semiconductor and technology equity complex.
What the calendar says
There are no high-impact events on the calendar for the relevant jurisdictions over the next 30 days, so the desk's view rests on positioning and flow rather than scheduled catalysts. That makes the dollar leg the dominant near-term driver by default — without a data print to reset rate expectations, USD direction will be dictated by yield momentum and risk appetite. The absence of a calendar catalyst also means the Hormuz normalisation path remains the key idiosyncratic swing factor for the oil leg.
Key takeaways
- 01ING attributes the metals slide primarily to a firmer dollar and higher US yields, not to a deterioration in physical demand.
- 02Copper printed a near four-month low around $13,657/t, down from September's record near $15,000/t, with the desk flagging further USD strength as the key near-term risk.
- 03OPEC crude output rose almost 2m b/d in October to 27.16m b/d, with Saudi at 9.2m b/d and Iraq near 4.5m b/d, easing Brent to around $91/bbl.
- 04Aluminium's LME cash premium of more than $150/t over three-month points to persistent short-term supply tightness, undercutting a pure demand-shock read.
- 05ING keeps volatility expectations elevated, with the pace of normalisation through the Strait of Hormuz the key driver for the oil outlook.
Market implications
Watch the dollar index and US 10-year yield as the transmission channel — a further leg higher in yields would extend copper's slide toward the $13,000/t handle and keep gold on the back foot. Brent around $91/bbl is the level to monitor for the Hormuz risk premium: any disruption to the alternative routing would reprice crude sharply higher and flip the supply-normalisation narrative. Aluminium's $150/t cash-three-month backwardation is the tell — if it collapses, the demand-shock interpretation gains traction.
Risks to this view
The call is invalidated by a dollar reversal — a softer US 10-year yield or a dovish repricing of rate expectations would lift the metals complex and force the desk to abandon the USD-strength thesis. On the oil leg, any disruption around the Strait of Hormuz that forces a re-routing of regional crude flows would spike Brent and invert the supply-normalisation read. A genuine AI-demand downgrade in technology equities, rather than a repositioning slide, would also deepen copper's fall beyond the desk's positioning-driven framing.
Articles The Commodities Feed: Stronger dollar weighs on commodities Published 08:00 Commodities daily Translate Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download A firmer dollar and higher US yields have weighed on metals, pushing copper and gold lower. Iron ore has also weakened, while oil slipped as Middle East supply recovered Ewa Manthey and Warren Patterson Gold extended its decline for a third session Energy – Oil slips as Middle East output rebounds Oil prices edged lower this morning, with Brent around $91/bbl as recovering Middle East supply eased immediate concerns over availability. OPEC crude production increased by almost 2m b/d in October to 27.16m b/d, led by Saudi Arabia, Iraq and Kuwait.
Saudi production climbed to 9.2m b/d, close to pre-war levels, while Iraq produced almost 4.5m b/d. Regional crude flows are approaching pre-war levels, but exports continue to rely on alternative routes around the Strait of Hormuz, leaving supply vulnerable to further disruption. OPEC kept its demand forecasts unchanged, expecting global oil demand growth of 200k b/d this year and 2.6m b/d in 2027.
We expect volatility to remain elevated, with the pace of normalisation through Hormuz still the key driver for the outlook. Metals – Copper drops to trade near four-month low Copper traded near a four-month low this morning as renewed selling in technology stocks and a firmer US dollar weighed on the metals complex. LME prices briefly fell to $13,657/t.
The market has pulled back from September’s record near $15,000/t, with investors reassessing expectations for AI-related demand while uncertainty over US import tariffs remains unresolved. Further dollar strength could keep copper under pressure in the near term. Aluminium was also slightly weaker, although nearby LME spreads remain exceptionally tight.
Cash metal traded at a premium of more than $150/t to the three-month contract this week, pointing to continued short-term supply constraints. Elsewhere, iron ore prices continued to retreat, with the Singapore benchmark falling as much as 1.6% to $90.70/t, extending its decline into a fourth day. Chinese iron ore futures also weakened, alongside losses in rebar, as softer steel markets kept pressure on the raw material complex.
The move leaves iron ore trading close to the psychologically important $90/t level. We remain bearish on iron ore as weaker Chinese steel demand and growing seaborne supply weigh on the outlook. In precious metals, gold extended its decline for a third session, slipping below $4,000/oz as stronger US inflation data and hawkish comments from Federal Reserve officials pushed Treasury yields higher.
The market is increasingly pricing in the possibility of another rate hike, providing support to the dollar and weighing on non-yielding gold. Attention now turns to upcoming US inflation data and further comments from Fed officials. While higher rates and a stronger dollar could continue to weigh on gold in the near term, we remain constructive over the longer term, supported by central bank buying and safe-haven demand.
Commodities Feed Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Ewa Manthey Commodities Strategist Ewa Manthey is a Commodities Strategist based in London.
She joined the bank in September 2022 and covers the entire commodities complex, with a particular focus on the metals markets. She has… Warren Patterson Head of Commodities Strategy Warren Patterson is Head of Commodities strategy based in Singapore. He joined the bank in April 2016 and covers the entire commodities complex.
Previously, he worked at a commodities trade house… In this article Energy – Oil slips as Middle East output rebounds Metals – Copper drops to trade near four-month low
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